Govt Projects Driving IT Networking, Storage Growth

Digitization efforts from government and businesses are driving the IT networking and storage markets in India. According to IDC, the Networking market (including LAN and WLAN hardware) in India witnessed highest revenue since CY 2008, with over 20% growth year on year. In a separate report, IDC saw the storage market saw a marginal year-on-year de-growth in vendor revenue) and stood at $ 60.85 million for Q4 2014. However, TB sold continue to grow irrespective of revenue de-growth and witnessed a double-digit year-on-year growth in Q4 2014 due to decrease in $/GB depicting the ever increasing storage demand.

IT networking growth

Cisco retained its leadership in the Ethernet Switch and Router market, increasing its revenue quarter on quarter and continued to be the vendor of choice for top telcos and other enterprises for their pan-India projects. 2014 was largely attributed to LTE and 3G investments but CY 2015 is expected to be a mix of investments from telecom and other verticals like government and BFSI. Further, the contribution from SMB segment is expected to grow and investments from utility and manufacturing verticals are expected to increase in the next few quarters.

Visionary projects like Digital India and Smart Cities are expected to see some pilots and testing in CY 2015. The WLAN market in India clocked a 3.8% growth quarter on quarter and 47.5% year on year during Q4 2014, driven by the traditional segments such as the enterprises and campuses. Education and Professional Services verticals topped the list in contributing to the WLAN market in India during Q4 2014. The continued deployment of hot-spots by government and investments from SMB segment are expected to continue in the coming quarters as well.

Suman Bisht, Market Analyst - Enterprise Networking and UC&C IDC India, believes the increasing adoption of 3rd platform, i.e., the blend of social media, mobility, big data & analytics and cloud computing in the operations and delivery aspect of enterprises will attract more investments in the wired as well wireless networking infrastructure. “More investments from the government, both central and state, are very much on the cards, given the demand for the connectivity, accessibility and surveillance in the country,” informs Bisht.

“Government announcements and investments for the visionary projects are sure to attract more investments in the network market as the traffic grows to support all these initiatives,” says Gaurav Sharma, Research Manager, Enterprise Computing, IDC India.

Innovation in networks would be backed by developments in SDN and NFV are increasingly getting attention from organizations across verticals due to their inherent capabilities of bringing agility, flexibility, cost control, automation and availability in the networks of future. “This will also be a year of refresh, rollouts and new innovations in the network,” he says.

IDC attributed to a combination of reasons owing to adoption of technologies like virtualization and compression that are pushing the capacity demand to decrease from its traditional buying trend, growing acceptability of cloud based storage and services and pending investments across verticals that were expected in 2014. A combination of infrastructure refresh across verticals, government projects and investments from new age organizations in verticals like e-commerce are expected to boost demand in CY 2015.

The storage scenario

In the storage category, EMC continued to lead the market followed by IBM, NetApp and HP. Banking, manufacturing, communications & media and professional services continued to be the dominant verticals in Q4 2014 though and healthcare and transportation emerged as the fastest growing verticals and are expected to contribute in CY 2015 as well.

According to Dileep Nadimpalli, Senior Market Analyst, Storage, IDC India, ” Cloud based storage is gaining traction particularly in the SMB segment, new start-ups and enterprises for their non-critical business data. All the storage vendors are positioning their cloud offerings accordingly to capture the incremental growth in SMB segment.”

Sharma believes, emerging verticals and players across segments will play a significant role in providing a noticeable mindset shift from traditional storage planning, evaluation and buying patterns in CY 2015.

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